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hey guys it is julie here with jt wealth today we are chatting about the queen of etfs and arc invest so let's get into it so welcome back everyone and thank you for being here today we are going to discuss our favorite three etfs at arc invest we're going to also quickly before that go over what exactly an etf is and how they work plus we'll touch a bit on who arc invest is as well as their founder kathy wood before we get into all of that this is just your quick reminder to make sure that you are subscribed to our channel it helps you stay up to date with all of our latest videos and really helps the channel grow and hit that like button while you're at it too so what exactly is an etf it is an exchange traded fund that is basically a collection of securities such as stocks that often tracks an underlying index although they can't invest in any number of industry sectors or use various strategies so a well-known example is the spy etf and this basically tracks the s p 500 index an etf is similar to a mutual fund in the sense that it is a fund of funds however it does differ in the fact that the etfs can be traded throughout the day just like a stock whereas a mutual fund is just bought at the end of the day at that net average value now etfs do offer lower expense ratios and fewer broker commissions than buying all of those stocks individually now there are two main types of management styles for etfs and that is passive versus active so passive is like that spy index fund that we mentioned previously where it's purchasing the underlying stocks to mimic the s p 500.
now an active etf has a portfolio manager and a team of analysts whose job it is to monitor that etf and constantly be updating it and adjusting the stocks held within it it is that constant day-to-day management on an active etf that causes the management expense ratio to be slightly higher obviously you're not going to be willing to pay a higher management expense ratio unless you are seeing the returns to justify it so who is arc invest well arc invests across sectors geographies and market caps seeking to identify companies missed by traditional sector-based strategies so this quote from kathy wood says that disruptive innovation is often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be they aren't sizing the opportunity and they aren't analyzing the disruption catherine wood is the ceo and cio of arc invest and has a plethora of investing experience dating back 30 plus years in the industry traditionally kathy wood is not a big fan of indices as she's not looking to track the market as a whole she is looking for things that no one else is tracking and that are going to disrupt that usual market in their attempt to find this disruptive technology kathy wood gives arc analysts a broader scope to explore when they're looking for these companies rather than the typical narrow area focus in one sector so arc has five actively managed innovation etfs that are listed as seen there today we are going to focus on those top three which is the arc innovation etf the arc autonomous technology and robotics and then the arc next generation internet etf first let's take a look at arc k so this is their etf that kind of expands across multiple sectors arc believes the securities held in rk present the best risk reward opportunities from ark's innovation based themes so these really offer a tool a diversification due to very little overlap with traditional indices so it can be a complement to traditional value or growth strategies over on the right we have some of our fun details so you can see their assets under management in this is 4.8 billion dollars management expense ratio coming in at 0.75 and the typical number of holdings being between 35 to 50.
now here you can see all of the different elements and sector weights i'm not going to read through all of them because obviously that's a lot of information but you can see how well diversified they are across healthcare to communications to industrial so a wide variety of areas within this fund here you can see the top 10 holdings in rk with some pretty recognizable names we have tesla square crisper roku lending tree on the right we can see the growth of 10 000 since inception so this fund has been around since 2014 and their annualized rate there has been over 26 percent with over 61 returns in the last three months now let's take a look at arc q which narrows in that focus to autonomous technologies and robotics arc q focuses on robotics autonomous vehicles energy storage 3d printing and space exploration so according to arc's research the autonomous ride-hailing opportunity should be worth more than 1 trillion today 5 trillion by 2024 and 9 trillion by 2029 in this fund we have assets under management at about 317 million expense ratio the same at 0.75 and the number of holdings between 30 to 50.
the top focus of the rq fund here we have broken down into a nice little pie where we can see a big portion in autonomous vehicles robotics and 3d printing so it is this autonomous taxi network of the future that has kathy wood one of the biggest bulls on tesla and has led to her discussing price projections getting close to seven thousand dollars per share for tesla which is why it is not surprising that when we look at the top ten holdings in rq in the number one spot we once again are seeing tesla weighing in around that 13 mark right now on the right we have that growth rate again since inception an impressive 17 and a three month return of 42 i know a lot of our viewers are big workhorse fans so i wanted to do a little deeper dive into this fund and show you all of their holdings which includes workhorse group now considering that this is an etf that focuses on those disruptive technologies and a good portion of that on autonomous vehicles i think it really speaks volumes that there was only two ev companies in this fund and that is tesla along with workhorse and they have been increasing their position over the last few months as well last but not least we have arc w which is the next generation internet etf now for any of you sitting at home watching this on your laptop or on your cell phone somewhere hopefully you believe in the future of the internet arc w focuses on the innovative internet technologies including cloud computing big data digital media e-commerce blockchain technologies and the internet of things so based on arcs research deep learning has created one trillion dollars in market capitalization but arcs believes it'll be 30 trillion by 2037.
sidebar deep learning is basically an artificial intelligence function that mimics uh the workings of the human brain as far as processing data and patterns in decision making on a really basic level think of alexa and her learning to understand what you're asking the breakdown of the fund here obviously we're heavily weighted in the information technology sector as well as communication services a lot of that focus being on cloud computing cyber security e-commerce big data and machine learning and so on this may or may not come as a surprise but our top one holding in this again is tesla followed by other big companies like square roku zillow lending tree etc since deception we have a whopping 32 percent return and three months at over 60 percent in a recent interview kathy woods mentioned times of crisis being great for innovative companies now obviously we've all been going through a bit of a crisis so far here in 2020 and innovative companies solve problems so more problems more innovation so this is a great time for these companies to come in and change the way that we are living our lives think about all the teleworking that's been happening these zoom meetings the digital payments the online services the list goes on and on so earlier i touched on those management expense ratios and how an actively managed etf is going to have higher fees than a passive one so on an indexed etf you're maybe paying 0.1 percent or so and on these we were showing around 0.75 percent as that management expense but what does that actually get you well in this case it gets you that expertise to well outperform the market we had a little bit of a dip back in april or so but you can see the recovery was vastly different for the spy s p 500 index versus these arc invest funds year to date our spy index etf there is about 5.10 percent our rq 49.11 even better than that is our k at 79.48 and the very top of our chart we have arc w sitting at 82.72 percent to clarify here when you're looking at the chart those percentages are on the far right up in the top left is the stock price for each of these shares guys i know that we are not comparing apples to apples here these are very different etfs as far as their targets and what they hold but what i'm saying is just do not be afraid of slightly higher management expense ratios for an actively managed etf i am certainly not known as a risky investor i like to focus on solid dividends and growth stocks and i'm not saying just go all in on one of these arc funds but i think they definitely have a place as a portion of your overall portfolio they provide a really unique exposure to these disruptive technologies if you're looking to get into some up and coming growth stocks this is a great opportunity to let those experts do it for you etfs are great as far as you do the research ahead of time you pick that fund that you want to be in with that specific manager and then you let them worry about all of that rebalancing afterwards so that is my overview of my three favorite arc etfs i think kathy wood is doing amazing and has a really unique approach to how she is managing these funds and it's going to be exciting to see where this all goes obviously it's been very successful so far so please leave a comment down below let me know your thoughts on etfs on arkhanvest or your thoughts on her bullish outlook on tesla and how much further it could go so make sure that you are subscribed hit that like button and have an awesome day cheers
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